Barclays marks £11.6bn profit with big pay-outs
More than 23,000 investment bankers at Barclays pocketed an average £191,000 in pay and bonuses as the banking giant surged to record profits of £11.6bn last year, it emerged yesterday.
The pay-outs provoked anger despite chief executive John Varley and president Bob Diamond sacrificing bonuses for the second year in a row in a bid to pacify clients and shareholders hit by recession.
Barclays beat City expectations with a 92% jump in pre-tax profits — helped by the sale of its fund management arm and a bumper haul from investment banking arm Barclays Capital. The bank acknowledged the ‘intense public interest and concern’ over pay and said the share of BarCap revenues paid in salary and bonuses fell from 44% to 38% — but the total pot was almost double the previous year at £4.5bn.
Across the whole group, Barclays paid out £2.7 bn in bonuses — £1.5bn in cash bonuses and £1.2bn in long-term awards vesting over three years.
Of this around 80% or £2.1bn was paid out in bonuses to investment bankers, although Barclays has ‘managed down’ the pay pot to reflect the £225m paid to the Treasury under the bonus tax introduced at the end of last year.
Mr Varley said the bank had ‘got to be sensitive’ about what it paid when public sector workers were facing salary freezes due to recession, but it had a responsibility to investors and clients to ‘field the best team’.
Barclays is deferring all bonuses for top directors over three years and they are subject to clawback. Pay principles from the Financial Services Authority (FSA) and G20 summit have also been implemented.
Royal Bank of Scotland, which is 84% owned by the taxpayer, is likely to use Barclays' payouts to gauge the level of its own bonuses to investment bankers, to be unveiled at annual results next week.